You know how much we love BIG call option buys in little known, thinly traded stocks. So we were happy to see this very large buy in Kindred Healthcare (KND) this morning.
One trader bought 2,148 November $20 calls in KND in late morning trading today. Almost all of those were bought at the ask. This opening call buy in this healthcare services company had a transaction value of over $290,000. A nice sized bet for a small thinly traded company?
Kindred Healthcare (KND) is currently trading at $19.45 up just 4 cents, on average volume at best. It is well off it’s intraday low of $19.20. KND has a 52 week high of $26.81, and a low of $12.95 on the year. That my friends, is quite a large trading range, so this stock is no stranger to volatility.
Kindred Healthcare (KND)announced quarterly earnings on August 5th, and numbers were lower than expected. But this trader must know something good is yet to come out regarding the company news. These calls are now $1.35 to $1.40, last traded at 1.35 down 30 cents on the day.
We like this trade given it’s size, and especially the thinly traded nature of the stock, as well as the November expiration, which gives us some time to see what transpires here.
Eight analysts currently follow Kindred Healthcare (KND). The average rating on KND is a “Hold” and the average price target is $26.60. KND.com is currently not profitable, with analysts expecting a 12 cent per share profit for the coming quarter, and for the fiscal year a profit of $1.07 per share is expected.
We would suspect that since earnings have passed, this call buy is a sign of an impending upgrade from a major firm. One that likes to buy call options in the stocks they are about to upgrade.
Either way, we are interested in this Kindred Healthcare (KND) call buy and are in the Novembes with the “smart money”.